Intelligence Predicts Choice of Absolute Versus Positional Income

Positional goods are those whose valuation depends, in part, on the levels held by others. For example, if the productivity of all PhD students doubles, the rising tide of publications would not necessarily increase anybody’s job prospects, since publication records are evaluated relative to each other. Other goods, such as the amount of food at a picnic, are non-positional. A picnic feast can be relished by all, and the satiated are not made better if some go hungry. Many goods lie in between. Indoor plumbing reduced the in convenience of bathroom visits, but before it was universal, its value came partly from having it when one’s neighbors did not. Since income can be used to purchase indoor plumbing, swimming pools and other things in this intermediate category, we can presume that income, itself, is a positional good to some extent.